Sunday, June 29, 2008

A Splash of Cold Water (Or Is That Oil?)

From Rigzone a timely article that addresses the costs and challenges of drilling, even if the Outer Continental Shelf were opened up. Read carefully what the article states about the alleged millions (billions?) of barrels of oil out there:

Producers will need to proceed carefully because, despite the 18-billion-barrel figure released by the government, no one knows what's really in the off-limits waters.

The U.S. Minerals Management Service, which oversees offshore energy development, came up with the estimate by extrapolating from nearby fields and exploration work performed before bans were implemented.

In other words, it's mostly guesswork. The Atlantic and Pacific coastal waters are almost entirely undeveloped, with even surface exploration work banned since the 1980s. The restrictions came as states worried about the environmental and economic impact of a spill from an offshore platform.

So the next time one of our Presidential wanna-be's starts talking trash about all the oil "out there", re-read this and ask yourself just when would that black gold make it to market? And what would that market look like when it arrives?

1 comment:

The North Coast said...

It is revealing of the incredible depth of ignorance among our public officials and citizenry alike, that anyone can get excited about 18 billion barrels.

That is a drop in the bucket relative to current demand, which is about 86 million barrels a day, or 31 BILLION BARRELS A YEAR. Production seems to have peaked at 85 million barrels.

Think about that number- 31 billion. Then think about maybe 20 billion barrels in ANWR and 20 billion more that Petrobas is tapping into, and other little 20 billion barrel finds.

Think about the fact that of the 33 billion that Petrobas thinks it found, only 5 billion are recoverable, at best.

5 billion more, AT BEST, in the Bakken formation.

5 billion more in the Antarctic.

And 5 billion more here and there.


Demand still growing.

Given the speed with which we have depleted the supergiants, it is very easy for anyone with a grasp of 8th grade arithmetic to figure out that in another 10 years, we are going to be in steep depletion, given a 5% to 8% per annum depletion rate.

Start hoarding food and blankets, is all I have further to offer to clueless.